Circle — the operator of the stablecoin USD Coin (USDC) — has released its first annual report on the development and prospects of the coin’s economy.
The State of the USDC Economy — our first annual report. https://t.co/JkgArXaWXl
— Jeremy Allaire (@jerallaire) January 17, 2023
Founder and CEO Jeremy Allaire recalled that in 2013, when the stablecoin was being developed, he envisaged it as a “dollar for the internet.”
«Now, ten years later, USD Coin (USDC) is breaking into the mainstream. By almost all metrics and trends the stablecoin economy is growing, healthy and on track to becoming the primary means of conducting economic activity at a global network scale», he said.
According to the report, the assets are fully backed by reserves, 80% of which consist of three-month U.S. Treasury securities — among the most stable and liquid notes. By the end of January this backing of the stablecoin will be fully transferred by the company to a regulated fund managed by BlackRock.
The remaining 20% of the reserves are held in cash, spread across accounts at eight partner banks.
Monthly financial-state audits are conducted by the renowned consulting firm Grant Thornton. Going forward, Circle plans to switch to Deloitte of the Big Four as its auditor. The audit results are disclosed in accordance with standards for public companies.
Since its launch in 2018, more than $213 billion worth of coins have been redeemed.
During this period, USDC’s market capitalization has risen to about $44 billion — up 860%. The supply of the “physical dollar” stands at $2.3 trillion, but over the same period it has grown by 8%.
Circle expects further rapid growth, driven by three main trends:
- the development of e-commerce and payments via devices;
- recognition of the need to transform cross-border transfers given their slow speeds and high fees;
- reduction of cash usage as a medium of exchange.
The company noted that USDC operations comply with all regulatory requirements. As an example, Circle cited the blocking of assets in the wallets of the mixing service Tornado Cash following the U.S. Treasury sanctions.
As a reminder, in July the company published its first monthly report on the state of USDC reserves.
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